Danske Bank seeks holder consents to replace issuer for demerger plan

By Susanna Moon

Chicago, May 2 – Danske Bank OYJ has begun separate consent solicitations to amend three series of covered bonds to substitute Danske Mortgage Bank plc as the new issuer.

Danske is asking to replace the issuer and also to release and waive rights and claims arising under Finnish law for the demerger, as proposed by an extraordinary resolution, according to a bank notice.

The issuer has scheduled a bondholders meeting for May 31.

The bonds covered by the solicitations are as follows:

• €1 billion 1.625% covered bonds due 2019 originally issued by Sampo Bank plc;

• €1 billion 0.25% covered bonds due 2020; and

• €1 billion 3.875% covered bonds due 2021 originally issued by Sampo Housing Loan Bank plc.

The early participation fee will be 0.1% for consents submitted in favor of the proposals by 11 a.m. ET on May 18.

The consent solicitations will end at 11 a.m. ET on May 25.

Danske Bank Group is planning to merge its activities in Finland, consisting of the issuer and Danske Bank A/S, Helsinki Branch into a single branch, in an effort to simplify the organization and improve efficiency, the release noted.

The uniform organizational structure across Nordic markets will be achieved through a cross-border merger in which the issuer will be dissolved and cease to exist, the release added.

The issuer said it is soliciting consents “to receive confirmation from covered bondholders that they support the demerger and the proposed amendments and thereby to remove any unforeseen legal uncertainties for existing stakeholders including the covered bondholders.”

“However, covered bondholders should note that it is the intention of the issuer to consummate a process which achieves substantially the same result as the demerger (and the proposed subsequent cross-border merger) irrespective of the outcome of the consent solicitations, and which may be achieved without any consent of covered bondholders and would not constitute a default under the terms of the covered bonds (nor would the subsequent cross-border merger).”

The consent solicitations are only being made to holders who are not U.S. persons under Regulation S, and there is no “inter-conditionality” for the proposals between any bond series.

The quorum required for each meeting is 50% for the 2019 covered bonds and the 2020 covered bonds and is 75% for the 2021 covered bonds.

To pass, the proposals require a majority vote consisting of at least 75% of the votes cast at the meeting.

The demerger is expected to close on Oct. 1.

The solicitation agents are BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com), Danske Bank A/S (+45 45 14 32 33 or liabilitymanagement@danskebank.dk) and Merrill Lynch International (+44 20 7996 5420 or DG.LM_EMEA@baml.com). The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or danskebank@lucid-is.com).

Danske Bank is a Copenhagen, Denmark-based bank.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.